July 28, 2008

Consumers to get 10-12 3G players per circle

DoT identifies more spectrum, to expand auctions from earlier estimate of five in each service area.

The Department of Telecommunications (DoT) has identified between 51 and 60 MHz of spectrum, the radio frequencies that enable wireless communications, in several service areas that will allow it to offer between 10 and 12 licences to operators to introduce third-generation (3G) services.

This marks a significant increase from the 3G policy that DoT had finalised — and is awaiting government clearance — of auctioning only five licences per circle on the basis of an availability of 25MHz of spectrum. 3G services enable high-speed download of data like movies and music on the mobile.

The 3G auction will now be undertaken based on the fresh availability of spectrum in various circles.

Based on the higher spectrum availability, DoT will now be able to offer licences to 12 operators each in Andhra Pradesh, Tamil Nadu (including Chennai), Haryana, Karnataka, Orissa and Kerala; and 10 licences each in Kolkata and Madhya Pradesh.

SPECTRUM ON CALL

Service area

3Gspectrumavailable*

No. of operatorsthat can beaccommodated

Andhra Pradesh

60

12

Tamil Nadu with Chennai

60

12

Haryana

60

12

Karnataka

60

12

Kerala

60

12

Kolkata

54

10

MP

51

10

Orissa

60

12

Maharashtra

48

9

Mumbai

42

8

Punjab

40

8

West Bengal

30

6

Delhi

21

4

Gujarat

23

4

* in MHz

DoT, however, has limited spectrum in Delhi (21 MHz), Gujarat (23 MHz) and Himachal Pradesh (21 MHz), which is enough to permit only four operators.

The identification of so much extra spectrum is significant as there are few other countries that offer consumers so many 3G service providers to choose from.

Globally, the number of operators per country ranges from two to a maximum of five. The UK has five 3G players, Australia and Brazil four each and most European states have between two and three. Singapore has only two players and the Philippines three.

Overall, there are 228 operators in 94 countries that offer 3G services.

With the government already issuing 11 to 13 licences for 2G services (second generation, or the current level of services) in every circle Indian consumers might get to choose from 15 to 16 operators in each circle for their mobile services (2G and 3G), which is unparalleled anywhere in the world.

But many experts said this might put pressure on the viability of the business for new players.

“The valuation of our licence has virtually halved or become a third of what we had estimated in January. We were looking at $4 billion; currently investors are chary about paying even $1-2 billion. That is because the market, despite the growth, cannot accommodate so many players,” said the chairman of a company that recently received an all-India licence.

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